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Sales Terminology Explained

sales terminology

The terminology in a sales environment can be quite complex. This guide explains phrases typically used by sales professionals in business and their definition. I have also written 100+ Sales Acronyms & Abbreviations which is an interesting read.

This article contains over 100 terms you may see or hear during your sales career:

  1. A/B Testing: Also referred to as ‘split testing’ is the process of comparing two versions. For example, when prospecting you might draft two emails and send them to two different sets of contacts of the same role in different companies to see which has the better outcome.
  2. Account Executive (AE): A sales professional responsible for nurturing potential clients through all or some of the steps along the sales process.
  3. Active Listening: A technique that is used to fully concentrate on listening to situation, challenges, motivations and needs of a potential client.
  4. Account-Based Selling (ABS): A multi-touch, hyper-personalised strategy targeting high-value accounts. Generally this is coordinated across a number of teams who work together to close these accounts.
  5. Business-to-Business (B2B): The term used when a business sells a product or service to other businesses.
  6. Business-to-Consumer (B2C): The term used when a business sells a product or service directly to an end user.
  7. Bottom Up Approach: A term used during prospecting when you’re engaging with people at the lower level of seniority within a targeted company and are typically referred up.
  8. Business Development Representative (BDR): A sales specialist also referred to as SDR (sales development representative), who focuses on generating new leads. An BDR would typically be responsible for the prospecting step of a sales process.
  9. Before-After-Bridge (BAB): Is a sales technique designed to make your product or service appeal to the needs of a potential buyer before you present your solution, and after that explaining how things will improve with the purchase. This three step technique works well when used in cold emailing.
  10. Benjamin Franklin Close: This closing technique shows value by listing down the pros and cons of a solution and showing why the reasons to buy (pros) are better than the reasons not to buy (cons)
  11. Blanket email: Refers to an email with the same content sent out to a mass audience. Sales example: An email regards to a new product or service not personalised and then sent out to every prospect on a sales reps list.
  12. Bottom of the Funnel (BoFu): The final stages of a buyer’s journey and the smallest parts of the sales funnel. This corresponds to the last steps of the sales process where the prospect will soon be ready to make the decision to purchase
  13. Buyer Persona: A semi fictionalised  profile that defines the buyer or user characteristics within a company’s ideal customer profile, also referred to as a User Profile. Defining this target audience will help sales reps qualify leads. This information can be located in a company’s Sales Playbook.
  14. Buying Signals: Actions buyers take to indicate they could be close to making a decision to buy. This could be asking for specific information around products or service, asking about payment options, repeating a benefit statement, etc.
  15. Brag Book: This is a collection of customer stories, testimonials, case studies and other relevant information collected from satisfied customers. The contents illustrate how a business has met and exceeded a customers expectations. It is not recommended to use this phrase when speaking to potential customers, but instead to use its contents as part of a sales strategy. This information can be located in a company’s Sales Playbook.
  16. Business Development Manager (BDM): Also referred to as a Sales Development Manager. The role typically serves as a bridge between sales and marketing. Responsible for coaching and mentoring BDRs to scale lead generation and aid in the process of qualifying sales leads.
  17. Closed- Ended Question: These are narrow in focus and usually answered with a single word or short sentence, which is an automatic response like a “yes” or “no.” Examples of Closed-Ended Questions can be located in a company’s Sales Playbook.
  18. Compensation Plan: This plan details an employees wages, salaries, benefits, and terms of payment. When you work in sales a compensation plan includes details about bonuses, incentives and commissions that may be paid to employees. Certain details of compensation plans can be located in a company’s Sales Playbook
  19. Customer Acquisition Cost (CAC): The cost involved in acquiring a new customer. Typically factoring in all elements including advertising, lead generation, salaries, etc.
  20. Churn Rate: This is the percentage rate of customers that stop using a product or service. This is typically the standardised way a company measures business lost and is generally monitored alongside the Customer Acquisition Cost.
  21. Customer Lifetime Value (CLV): This metric is a predication of the total value a customer is worth to a business. Calculated from the customer lifecycle, retention rate, churn rate and average profit per customer, this is important when identifying high value customers and retaining them.
  22. Cold Calling: Also referred to as canvassing. This is an unsolicited telephone call or visit to a prospect who has not previously been contacted.
  23. Columbo Close: Is a closing technique to uncover hidden feelings. Used in the form of a turn-around with the objective of revealing unexpressed concerns.
  24. Cold Lead: A new lead generated, but not yet contacted.
  25. Collaborative Selling: Also referred to as side-by-side selling where both customer and supplier partner together for long term success. For this to happen both parties need to be completely open and the benefits need to be mutual. This approach, when done correctly, can lead to longer term agreements and in turn longer term success.
  26. Consultative Selling: This approach is where a sales rep is highly focused on building a relationship with the potential customer. The aim is to build trust and demonstrate value before offering a solution.
  27. Conversion Rate: Also referred to as win rate, it typically measures the total number of leads a sales rep works that ultimately become customers. For example: if you have 500 leads per month and 50 buy your product or service, then your conversion rate is 10%.
  28. Cross-Selling: The action of selling an existing customer an additional product or service related to their previous purchase. A historic example of this is if you were in a fast-food restaurant and the cashier asks the customer ‘would you like fries with that?’
  29. Call To Action (CTA): A term designed to prompt an immediate response or encourage an immediate sale (for example, ‘contact us now’ or ‘check out our website’). This is most often referred to words or expressions incorporated in sales scripts or advertising messages used in social selling.
  30. Customer Experience (CX): Describes the impression your company or brand leaves with a customer. A good customer experience is invaluable to an organisation and enables marketing teams to extract high praising case studies and testimonials that sales reps can use during the sales process.
  31. Customer Journey: This is typically the experience a buyer will go through from initial awareness of your product or service to final purchase. This is referred to in sales as the Sales Funnel.
  32. Channel Partner: A third party organisation that partners with a supplier to market and sell products or services on their behalf.
  33. Customer Relationship Management Software (CRM): A software for recording, monitoring and tracking interactions with existing customers and new leads as well as storing and analysing all the data collected.
  34. Canvassing: Also referred to as Cold Calling. This is an unsolicited telephone call or visit to a prospect who has not previously been contacted.
  35. Closed Won: Indicates the outcome of the closing stage of a sales pipeline when a purchase of a product or service has been agreed.
  36. Closed Lost: Indicates the outcome of the closing stage of a sales pipeline when the purchase of a product or service has been discontinued.
  37. Champion: A prospect who truly understands and loves your product or service. This individual will fight for you and convince others to buy your solution. This individual is typically created under a company’s Ideal Customer Profile (ICP) and located in their Sales Playbook.
  38. C-Level Executive: Also referred to as C-Suite Executive this term relates to people in high ranking positions within an organisation. The C stands for ‘Chief’ in Chief Executive Officer (CEO), Chief Technology Officer (CTO), Chief Marketing Officer (CMO), Chief Operating Officer (COO), Chief Financial Officer (CTO), etc.
  39. Close of Business (COB): Refers to the end of a business day and is used to set a deadline for a task to be completed.
  40. Decision Maker: In the context of sales this person has the authority to make a purchasing decision. Depending on the size of an organisation the decision-maker will typically get involved in the later steps of a sales process rather than in the research and vetting. This individual is typically created under a company’s Ideal Customer Profile (ICP) and located in their Sales Playbook.
  41. Differentiator: This is a term used to distinguish your product or service from the competition.
  42. Deferred Revenue: Refers to payments received in advance for services or products which have not yet been performed or goods which have not yet been delivered.
  43. Direct Selling: Refers to products or services sold directly to the consumer.
  44. Discovery Call: This action is to determine whether or not the seller and the buyer are a good fit for each other. Discovery starts at the prospecting step of the sales process, but it’s typically set up as a separate meeting via video conference or telephone call to allow a longer time period for gathering more important information.
  45. Emotional Sale: Playing a part in almost every decision making process, this approach relies on emotions such as excitement of something new or leveraging a negative experience with a competitor.
  46. Elevator Pitch: Supplying an explanation or description of a company, product or service in a limit time frame. This term derived from organisations in the past believing that a pitch to a decision-maker should be able to be made in the time it takes an elevator to go up or down.
  47. Forecasting: A term used to estimate a sales performance during a period based on current and historic data. Forecasting helps sales reps plan their weeks and months and allows senior leadership to set standards around expenses, profit, growth, etc.
  48. Field Sales Representative: A traveling salesman who is not based out of a company’s office. Typically these sales reps deal with closing high value prospects and either look after or have a hand in looking after key customers within their organisation.
  49. Gatekeeper: A person employed such as a secretary or personal assistant who protects decision makers from unwanted or irrelevant enquiries. Sales reps will most certainly come across gatekeepers during periods of their career.
  50. Hand Raiser: Refers to someone who is actively looking for sales engagement and further information in regards to a product or service.
  51. Intellectual Sale: As opposed to pressing on a buyer’s emotions during an emotional sale, this sale targets a prospects logic as they become fully aware why a product or service is a fast and cost effective solution in relation to their needs and pains.
  52. Ideal Customer Profile (ICP): A semi fictionalised description of a company’s ideal customer also referred to as an ideal buyer profile. Defining this target audience will help sales reps qualify leads. This information can be located in a company’s Sales Playbook.
  53. Inside Sales Representative: A sales professional who works at an office and does not typically visit clients’ premises. Historically sales have been made over the phone, but technology advancements have now allowed them to sell face to face via video conferencing.
  54. Influencer: A person within an organisation who has the ability to influence buying decisions around products or services. Sales professionals should target and leverage influencers as part of their daily strategy. This individual is typically created under a company’s Ideal Customer Profile (ICP) and located in their Sales Playbook.
  55. Key Performance Indicator (KPI): An important quantifiable metric used to evaluate an organisation or employee in achieving objectives for performance.
  56. Lead: This is an organisation or person that shows an interest in a product or service and who could potentially become a customer.
  57. Land and Expand: Refers to closing a sale and then increasing its future value through upselling.
  58. Lead Qualification Framework: Typically in the way of an acronym. This lays out the information required when prospecting a potential customer, before moving them through to the discovery step in the sales process. This can have as many elements as required, but typically these will be between 4 to 6 letters.
  59. Lead Scoring: Ranking prospects typically on a number scale and related to their behaviour such as interested and engagement. This allows sales reps to determine which leads are sales ready and should have priority over others.
  60. Lead Nurturing: The action of engaging and building strong relationships with potential customers and moving them through the steps in the sales process.
  61. Laggards: These are customers or adopters of products or services who buy at the end. Laggards are typically price sensitive and skeptical about trying new things.
  62. Marketing Qualified Lead (MQL): A lead that has been forwarded to sales by marketing, which is felt to be sales ready based on lead scoring criteria.
  63. Month-To-Date (MTD): This is a period starting at the beginning of a month and ending at the current date.
  64. Monthly Recurring Revenue (MRR): This is the amount of revenue a company can expect to receive from a subscription based sale each month. MRR is an important metric to understanding your businesses health and growth trajectory.
  65. Mirroring: A tactic that can be powerful when building rapport. The aim is to adopt the same verbal and physical behaviours as a prospect to establish a meaningful connection.
  66. Move The Needle: Refers to having a measurable effect on something. Sales example: “This new product launch should move the needle on our sales.”
  67. Middle of the Funnel (MoFu): Refers to potential clients who are halfway through their buying journey. These stages show an intent from the buyer as they continue through the sales process and sales reps take actions along their sales pipeline.
  68. Net Promoter Score (NPS): Typically using a 0-10 scale, this metric measures customers satisfaction and it’s used to determine how likely that customer is to recommend your products or services to others.
  69. Onboarding: The process of introducing a new customer to your products, services and potentially other divisions in your organisation. It is highly important to have a successful onboarding process where you demonstrate all the features and benefits of the solution purchased. This is a critical stage in developing a strong long lasting relationship. The onboarding information can be located in a company’s Sales Playbook.
  70. Open Rate: A metric used to measure the percentage of emails that are opened by the receiver compared to the number of emails sent.
  71. Open-Ended Question: A question that can-not be answered with a short response. Asking open-ended questions prompts a buyer to supply a more in depth explanation in order to prolong conversations and uncover important information. Examples of open-ended questions can be located in a company’s Sales Playbook.
  72. Pipeline Management: The process of overseeing and directing leads over various stages from contact to close. When a reps sales pipeline is managed correctly it makes forecasting more accurate and ensures they will have a greater chance of achieving their goals.
  73. Positioning: The aim of creating an image in a potential customer’s mind that clearly distinguishes you from your competitors.
  74. Profit Margin: The measure of how much money a company keeps in earnings. Typically calculated either as a net income divided by revenue or net profits divided by sales.
  75. Pitch: A planned and generally rehearsed line of talk that attempts to persuade a buyer to make a purchase.
  76. Puppy Dog Close: A sales technique where prospective buyers are allowed to use a product or service for a limited time free of charge before agreeing to purchase. The idea is that a buyer will fall in love with the solution and will not want to give it up, just like when you have a puppy in your arms in the pet store.
  77. Performance Improvement Plan (PIP): This is a formal plan a sales rep is placed on if they don’t hit targets that have been set. A PIP addresses any recurring performance issues and sets goals that the sales rep would need to achieve. These plans vary depending on the organisation but can result in termination of employment.
  78. Power Hour: An hour where all sales professionals are entirely focused on cold calling their prospects. SPIFFs are typically used here to motivate teams with rewards given to the person who accumulates the most appointments booked during the hour.
  79. Quota: Also referred to as a target. A quota is a specific number allocated to a sales rep by an organisation where a set amount of sales need to be achieved over a period of time
  80. Reply Rate: Refers to the amount of responses received by recipients of an email. This metric is important in measuring the performance of email campaigns for a business.
  81. Request for Proposal (RFP): A document which suppliers are asked to submit to a company interested in procurement of a product or service.
  82. Return on Investment (ROI): This is the ratio between net profit and cost of investment. This is typically used to evaluate the efficiency of an investment.
  83. Sales Referral: Is the act of an existing customer recommending or referring a potential customer to a sales rep or organisation. This is more likely to happen when you have happy customers.
  84. Retention Rate: Refers to the percentage of customers a company has at the beginning or a period and remain with the company at the start of another.
  85. Software as a Service (SaaS): A method of software delivery and licensing in which software is accessed online via a subscription rather than bought and installed.
  86. Sales Cadence: This is a sequence of different outreach methods a sales rep would use to engage leads. Typically this cadence would consist of phone, email and social channels. Sales cadence can be located in a company’s Sales Playbook.
  87. Sales Enablement: Is the act of providing sales professionals with tools to sell more effectively. The foundation is to supply the entire organisation’s sales teams with what they need to better engage with potential customers throughout the sales process.
  88. Sales Triggers: Refers to an event that creates an opening for a sales opportunity. An example would be if an existing prospect moved roles or if a company announced an expansion.
  89. Sales Cycle: This cycle would begin at the first contact and typically end when a sale occurs.
  90. Sandbagging: Refers to holding off closing active deals when a target/quota has been achieved for that month. These deals are then closed the following month to give a sales rep a greater chance to hit target in subsequent months.
  91. Side Selling: Typically refers to selling a supporting product or service to a customer who’s main product or service is supplied by a competitor.
  92. Smile and Dial: This is simply smiling when making unsolicited/cold calls to prospects.
  93. Smarketing: The practice of aligning sales and marketing efforts in an attempt to improve communication to create common goals, which will result in better opportunities.
  94. Split Testing: Also referred to as A/B testing is the process of comparing two versions. For example, when prospecting you might draft two emails and send them to two different sets of contacts of the same role in different companies to see which has the better outcome.
  95. Social Selling: Refers to sales professionals who use social media channels to engage and develop relationships with potential clients. Social selling is an important tool when prospecting as helps to obtain valuable information using channels such as LinkedIn, Twitter, Facebook, etc.
  96. Side-by-Side Selling: Also referred to as collaborative selling where both customer and supplier partner together for long term success. For this to happen both parties need to be completely open and benefit. This approach when done correctly can lead to longer term agreements and in turn longer term success.
  97. Sales Qualified Lead (SQL): Typically a lead generated by marketing and vetted by the same team. After initial contact from marketing, a sales rep would continue the engagement to explore the lead and their potential interest in a product or service.
  98. Service Level Agreement (SLA): In sales an SLA is an agreement between the marketing and sales departments that defines expectations from both sides. An example would be how frequently sales pursue leads and on the flip side how many leads are generated by marketing during a specific time period. This term is also applicable at a consumer level, where the service or product provider agrees a certain service criteria with the customer.
  99. Sales Acceleration: Refers to strategies or activities that can help a business move prospects through the sales pipeline at a greater rate of speed.
  100. Sales Development Representative (SDR): A sales specialist also referred to as BDR, who focuses on generating new leads. An SDR would typically be responsible for the prospecting step of a sales process.
  101. Sales Pipeline Coverage (SPC): Refers to how full a reps sales pipeline is relative to their quota. This is an important metric for sales managers as they make sure their reps have enough leads and are on track to hit target.
  102. Sales Process: A framework which sets out the steps a sales rep takes to turn a lead into a customer.
  103. Sales Funnel: The stages that a buyer goes through when deciding to purchase goods or services.
  104. Sales Pipeline: The actions a sales rep takes throughout the sales process.
  105. Sales Accepted Lead (SAL): This typically refers to a marketing qualified lead (MQL), which has been passed to sales who have then accessed and accepted that they will follow up. Depending on the structure of a company, the MQL may first pass to the Sales Development or Business Development team to start the qualification process before the lead is passed onto a sales executive.
  106. Sales Methodology: This is a framework that outlines how a sales rep approaches each step of the sales process. Sales methodology typically introduces discipline through a system of principles and best practices. Read my article A Brief History of Modern Sales Methodology to find out how it has evolved over the years.
  107. Sales Kickoff: A recurring event each year where achievements from the prior year are recalled and celebrated. Revenue and team targets are announced, keynote speeches and inspirational talks are given and awards are presented to the highest performing sales reps from the previous year as well as other within an organisation that have made stand out contributions to the business.
  108. Sales Pipeline Velocity: Measures how quickly leads are moving through a sales reps pipeline and how much value new customers provide over a given period.
  109. Sales Manager: Responsible for leading a sales team by setting targets, goals, designating tasks, formulating strategy and policies while coaching and mentoring sales professionals.
  110. Sales Development Manager (SDM): Also referred to as a Business Development Manager. The role typically serves as a bridge between sales and marketing. Responsible for coaching and mentoring SDRs to scale lead generation and aid in the process of qualifying sales leads.
  111. Sales Performance Incentive Funding Formula (SPIFF): Refers to a small, immediate bonus paid to sales professionals for hitting a set target or completing a task. A SPIFF is typically paid in addition to commission and bonuses. This information can be located in a company’s Sales Playbook.
  112. Top of the Funnel (ToFu): The part of the sales funnel that corresponds to the awareness stage of a buying process. This is the largest part of the funnel that shows the initial interest of a buyer as they enter the sales process to be vetted to see if they and the organisation are a potential fit.
  113. Total Contract Value (TCV): This metric measures how much a contract is worth once executed.
  114. Target: Also referred to as a quota. A target is a specific number allocated to a sales rep by an organisation where a set amount of sales need to be achieved over a period of time.
  115. Touchpoints: These are interactions a sales rep has with a potential customer. Typically calculated when phone calls, voicemails, emails and/or social messages are actioned.
  116. Top Down Approach: A term used during prospecting when you’re engaging with senior level people within a targeted company and are typically referred down.
  117. Tire-Kicker: This is a prospect who will go through the sales cycle with no intent in making a purchase. If they don’t have the budget, the purchase is not within their authority or they can’t influence such a decision, or their timeline is too far down the line then they are highly likely to waste the time of sales rep.
  118. Upselling: A sales technique where a customer purchases a more expensive product or service, upgrades or purchases add-ons to make a more profitable sale.
  119. Unique Selling Proposition (USP): Also referred to as Unique Selling point. This is what makes your product or service better than a competitor’s one.
  120. Weighted Sales Pipeline: Refers to a sales pipeline with opportunities in each stage that are assigned a value based on the likeliness they are to close. This method can allow for more accurate revenue forecasting as not every opportunity leads to a sale.
  121. Win Rate: Also referred to as conversion rate typically measures the total number of leads a sales rep works that ultimately become customers. For example: if you have 500 leads per month and 50 buy your product or service then your conversion rate is 10%.
  122. Whale: Refers to a prospect with the potential to bring enormous sales revenue into a company. Whales are generally very rare, but sales reps will pull out all the stops if one appears as these can hit multiple targets on a single close.
  123. Year to Date (YTD): Refers to the period of time beginning on the first day of a calendar or fiscal year up to the current date.

My article 100+ Sales Acronyms & Abbreviations is also an interesting read.

“We miss 100 percent of the sales we don’t ask for”

– Zig Ziglar

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Sales Terminology Explained

by Ben James time to read: 16 min
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